PARTNERS IN JDS Energy & Mining Inc. ACHIEVING Suite 900 – 999 West Hastings Street MAXIMUM Vancouver, BC V6C 2W2 RESOURCE 604.558.6300 DEVELOPMENT jdsmining.ca VALUE Pre - Feasibility Study Technical Report on the Magino Project, Wawa, Ontario, Canada Effective Date: January 18, 2016 Report Date: February 22, 2016 Prepared for: Argonaut Gold Inc. 9600 Prototype Court Reno, NV 89521 USA Qualified Persons Company Michael Makarenko, P. Eng. JDS Energy & Mining Inc. Dino Pilotto, P. Eng. JDS Energy & Mining Inc. Kelly McLeod, P. Eng. JDS Energy & Mining Inc. Ali Sheykholeslami, P. Eng. JDS Energy & Mining Inc. Khosrow Aref, P. Eng. Rockland Ltd. Mike Lechner, P. Geo. Resource Modeling Inc. David Salari, P. Eng. D.E.N.M. Engineering Ltd. Ian Hutchison, PE SLR International Corp. VANCOUVER | TORONTO | KELOWNA | WHITEHORSE | YELLOWKNIFE | TUCSON | HERMOSILLO A RGONAUT GOLD INC. M AGINO PRE-FEASIBILITY STUDY TECHNICAL R EPORT Date and Signature Page This report entitled Revised Pre-Feasibility Study Technical Report for the Magino Project, Wawa, Ontario, effective as of XXX was prepared and signed by the following authors: Original document signed and sealed by: “Michael Makarenko” February 22, 2016 Michael Makarenko, P. Eng. Date Signed Original document signed and sealed by: “Dino Pilotto” February 22, 2016 Dino Pilotto, P. Eng. Date Signed Original document signed and sealed by: “Kelly McLeod” February 22, 2016 Kelly McLeod, P. Eng. Date Signed Original document signed and sealed by: “Ali Sheykholeslami” February 22, 2016 Ali Sheykholeslami, P. Eng. Date Signed Original document signed and sealed by: “Mike Lechner” February 22, 2016 Mike Lechner, P. Geo Date Signed Original document signed and sealed by: “Khosrow Aref” February 22, 2016 Kosrow Aref, P. Eng. Date Signed Original document signed and sealed by: “David Salari” February 22, 2016 David Salari, P. Eng. Date Signed Original document signed and sealed by: “Ian Hutchison” February 22, 2016 Ian Hutchison, PE Date Signed Effective Date: January 18, 2016 i A RGONAUT GOLD INC. M AGINO PRE-FEASIBILITY STUDY TECHNICAL R EPORT NOTICE JDS Energy & Mining, Inc. prepared this National Instrument 43-101 Technical Report, in accordance with Form 43-101F1, for Argonaut Gold Inc.. The quality of information, conclusions and estimates contained herein is based on: (i) information available at the time of preparation; (ii) data supplied by outside sources, and (iii) the assumptions, conditions, and qualifications set forth in this report. Argonaut Gold Inc. filed this Technical Report with the Canadian Securities Regulatory Authorities pursuant to provincial securities legislation. Except for the purposes legislated under provincial securities law, any other use of this report by any third party is at that party’s sole risk. Effective Date: January 18, 2016 ii A RGONAUT GOLD INC. M AGINO PRE-FEASIBILITY STUDY TECHNICAL R EPORT Contents 1 Executive Summary ...................................................................................... 1-1 1.1 Introduction ................................................................................................................................. 1-1 1.2 Property Description and Ownership ......................................................................................... 1-1 1.3 Geology and Mineralization ........................................................................................................ 1-2 1.4 History, Exploration and Drilling ................................................................................................. 1-2 1.5 Mineral Processing and Metallurgical Testing ........................................................................... 1-3 1.6 Mineral Resource Estimate ........................................................................................................ 1-4 1.7 Mineral Reserve Estimate .......................................................................................................... 1-6 1.8 Mining ......................................................................................................................................... 1-7 1.8.1 Open Pit Mine Plan and Phasing ............................................................................................... 1 - 7 1.8.2 Mine Schedule and Operations ................................................................................................ 1-10 1.8.3 Waste Management ................................................................................................................. 1-12 1.9 Recovery Methods ................................................................................................................... 1-12 1.10 Project Infrastructure ................................................................................................................ 1-12 1.11 Environment Assessment and Permitting ................................................................................ 1-13 1.12 Capital and Operating Costs .................................................................................................... 1-14 1.12.1 Capital Costs ............................................................................................................................ 1-14 1.12.2 Operating Costs ....................................................................................................................... 1-15 1.13 Economic Analysis ................................................................................................................... 1-15 1.14 Conclusions .............................................................................................................................. 1-18 1.15 Recommendations ................................................................................................................... 1-18 2 Introduction ................................................................................................... 2-1 2.1 Basis of Technical Report .......................................................................................................... 2-1 2.2 Scope of Work ............................................................................................................................ 2-1 2.3 Qualified Person Responsibilities and Site Inspections ............................................................. 2-3 2.4 Sources of Information ............................................................................................................... 2-4 3 Reliance on Other Experts ........................................................................... 3-1 4 Property Description and Location ............................................................. 4-1 4.1 Location ...................................................................................................................................... 4-1 4.2 Mineral Titles .............................................................................................................................. 4-1 4.3 Royalties, Agreements and Encumbrances ............................................................................... 4-8 4.4 Environmental Liabilities and Permitting .................................................................................... 4-9 4.4.1 Environmental Liabilities ............................................................................................................ 4-9 4.4.2 Status of Environmental Approvals and Permits ........................................................................ 4-9 4.5 Other Significant Factors and Risks ......................................................................................... 4-13 5 Accessibility, Climate, Local Resources, Infrastructure & Physiography 5-1 5.1 Accessibility ................................................................................................................................ 5-1 5.2 Climate ....................................................................................................................................... 5-1 5.3 Physiography .............................................................................................................................. 5 - 1 5.4 Local Resources......................................................................................................................... 5-4 Effective Date: January 18, 2016 iii A RGONAUT GOLD INC. M AGINO PRE-FEASIBILITY STUDY TECHNICAL R EPORT 5.5 Infrastructure .............................................................................................................................. 5-4 5.5.1 Power ......................................................................................................................................... 5-4 5.5.2 Water .......................................................................................................................................... 5-4 5.5.3 Mining Personnel ....................................................................................................................... 5-5 5.5.4 Historic Tailings Management Facility ....................................................................................... 5-5 5.5.5 Potential Tailings Management Areas ....................................................................................... 5-5 5.5.6 Potential Waste Disposal Areas ................................................................................................. 5-5 5.5.7 Potential Processing Plant Sites ...............................................................................................